<PAGE>
Exhibit 10.1
Execution Copy
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THE ST. JOE COMPANY
$65,000,000 5.28% Senior Notes, Series G, due August 25, 2015
$65,000,000 5.38% Senior Notes, Series H, due August 25, 2017
$20,000,000 5.49% Senior Notes, Series I, due August 25, 2020
----------
NOTE PURCHASE AGREEMENT
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Dated as of August 25, 2005
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<PAGE>
TABLE OF CONTENTS
(Not a part of the Agreement)
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SECTION
HEADING
PAGE
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SECTION 1.
AUTHORIZATION OF NOTES..................................
1
SECTION 2. SALE
AND PURCHASE OF NOTES; GUARANTY.................... 1
Section 2.1. Purchase and Sale of
Notes.............................. 1
Section 2.2. Subsidiary Guaranty and
Intercreditor Agreement......... 2
SECTION 3.
CLOSING.................................................
3
SECTION 4. CONDITIONS TO
CLOSING................................... 4
Section 4.1. Representations and
Warranties.......................... 4
Section 4.2. Performance; No
Default................................. 4
Section 4.3. Compliance
Certificates................................. 4
Section 4.4. Opinions of
Counsel..................................... 5
Section 4.5. Purchase Permitted by Applicable
Law, Etc............... 5
Section 4.6. Sale of Other
Notes..................................... 5
Section 4.7. Payment of Special Counsel
Fees......................... 5
Section 4.8. Private Placement
Number................................ 5
Section 4.9. Changes in Corporate
Structure.......................... 5
Section 4.10.
Consent.................................................
5
Section 4.11. Subsidiary
Guaranty, Etc................................ 6
Section 4.12. Funding
Instructions.................................... 6
Section 4.13. Proceedings
and Documents............................... 6
SECTION 5.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...........
6
Section 5.1. Organization; Power and
Authority....................... 6
Section 5.2. Authorization,
Etc...................................... 6
Section 5.3.
Disclosure..............................................
6
Section 5.4. Organization and Ownership of
Shares of Subsidiaries;
Affiliates........................................... 7
Section 5.5. Financial
Statements.................................... 8
Section 5.6. Compliance with Laws, Other
Instruments, Etc............ 8
Section 5.7. Governmental Authorizations,
Etc........................ 8
Section 5.8. Litigation; Observance of
Agreements, Statutes and
Orders............................................... 8
Section 5.9.
Taxes...................................................
8
Section 5.10. Title to Property;
Leases............................... 9
Section 5.11. Licenses,
Permits, Etc.................................. 9
Section 5.12. Compliance
with ERISA................................... 9
Section 5.13. Private
Offering by the Company......................... 10
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Section 5.14. Use of
Proceeds; Margin Regulations..................... 10
Section 5.15. Existing
Indebtedness; Future Liens..................... 11
Section 5.16. Foreign Assets
Control Regulations, Etc................. 11
Section 5.17. Status under
Certain Statutes........................... 11
Section 5.18. Notes Rank
Pari Passu................................... 12
Section 5.19. Environmental
Matters................................... 12
SECTION 6.
REPRESENTATIONS OF THE PURCHASER........................
12
Section 6.1. Purchase for
Investment................................. 12
Section 6.2. Source of
Funds......................................... 13
SECTION 7.
INFORMATION AS TO THE COMPANY...........................
14
Section 7.1. Financial and Business
Information...................... 14
Section 7.2. Officer's
Certificate................................... 17
Section 7.3.
Inspection..............................................
17
SECTION 8.
PREPAYMENT OF THE NOTES.................................
18
Section 8.1. Required
Prepayments.................................... 18
Section 8.2. Optional Prepayments with
Make-Whole Amount............. 18
Section 8.3. Change in
Control....................................... 19
Section 8.4. Allocation of Partial
Prepayments....................... 21
Section 8.5. Maturity; Surrender,
Etc................................ 21
Section 8.6. Purchase of
Notes....................................... 21
Section 8.7. Make-Whole
Amount....................................... 21
SECTION 9.
AFFIRMATIVE COVENANTS...................................
23
Section 9.1. Compliance with
Law..................................... 23
Section 9.2.
Insurance...............................................
23
Section 9.3. Maintenance of
Properties............................... 23
Section 9.4. Payment of Taxes and
Claims............................. 24
Section 9.5. Corporate Existence,
Etc................................ 24
Section 9.6.
[Reserved]..............................................
24
Section 9.7. Notes to Rank Pari
Passu................................ 24
Section 9.8. Guaranty by
Subsidiaries................................ 24
SECTION 10. NEGATIVE
COVENANTS...................................... 25
Section 10.1. Leverage
Ratio.......................................... 25
Section 10.2. Unencumbered
Asset Value Ratio.......................... 25
Section 10.3. Secured
Indebtedness Ratio.............................. 25
Section 10.4. Fixed Charges
Coverage Ratio............................ 25
Section 10.5. Limitations on
Indebtedness............................. 25
Section 10.6. Limitation on
Liens..................................... 26
Section 10.7. Mergers,
Consolidations, Etc............................ 28
Section 10.8. Transactions
with Affiliates............................ 29
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Section 10.9. Nature of
Business...................................... 29
SECTION 11. EVENTS OF
DEFAULT....................................... 30
SECTION 12. REMEDIES
ON DEFAULT, ETC................................ 32
Section 12.1.
Acceleration............................................
32
Section 12.2. Other
Remedies.......................................... 33
Section 12.3.
Rescission..............................................
33
Section 12.4. No Waivers or
Election of Remedies, Expenses, Etc....... 33
SECTION 13.
REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...........
34
Section 13.1. Registration
of Notes................................... 34
Section 13.2. Transfer and
Exchange of Notes.......................... 34
Section 13.3. Replacement of
Notes.................................... 34
Section 13.4.
Legend..................................................
35
SECTION 14. PAYMENTS
ON NOTES....................................... 35
Section 14.1. Place of
Payment........................................ 35
Section 14.2. Home Office
Payment..................................... 35
SECTION 15. EXPENSES,
ETC........................................... 36
Section 15.1. Transaction
Expenses.................................... 36
Section 15.2.
Survival................................................
36
SECTION 16. SURVIVAL
OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT............................................ 36
SECTION 17. AMENDMENT
AND WAIVER.................................... 37
Section 17.1.
Requirements............................................
37
Section 17.2. Solicitation
of Holders of Notes........................ 37
Section 17.3. Binding
Effect, Etc..................................... 37
Section 17.4. Notes Held by
Company, Etc.............................. 38
SECTION 18.
NOTICES.................................................
38
SECTION 19.
REPRODUCTION OF DOCUMENTS...............................
38
SECTION 20.
CONFIDENTIAL INFORMATION................................
39
SECTION 21.
SUBSTITUTION OF PURCHASER...............................
40
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SECTION 22.
MISCELLANEOUS...........................................
40
Section 22.1. Successors and
Assigns.................................. 40
Section 22.2. Payments Due
on Non-Business Days....................... 40
Section 22.3.
Severability............................................
40
Section 22.4.
Construction............................................
40
Section 22.5.
Counterparts............................................
41
Section 22.6. Governing
Law........................................... 41
Signature................................................................
42
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<PAGE>
SCHEDULE A --
INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED
TERMS
SCHEDULE 2.2(a) -- Subsidiary
Guarantors
SCHEDULE 4.9 -- Changes in
Corporate Structure
SCHEDULE 5.4 -- Subsidiaries of the
Company and Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial
Statements
SCHEDULE 5.11 -- Patents, Etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
SCHEDULE 10.6 -- Existing Liens
EXHIBIT 1(a) -- Form of 5.28%
Senior Note, Series G, due August 25, 2015
EXHIBIT 1(b) -- Form of 5.38%
Senior Note, Series H, due August 25, 2017
EXHIBIT 1(c) -- Form of 5.49%
Senior Note, Series I, due August 25, 2020
EXHIBIT 2.2(a) -- Form of Subsidiary Guaranty
EXHIBIT 2.2(c) -- Form of Intercreditor
Agreement
EXHIBIT 4.4(a) -- Form of Opinion of Counsel for
the Company
EXHIBIT 4.4(b) -- Form of Opinion of Special
Counsel for the Purchasers
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<PAGE>
THE ST. JOE COMPANY
245 RIVERSIDE AVENUE, SUITE 500
JACKSONVILLE, FLORIDA 32202
$65,000,000 5.28% Senior Notes, Series G, due August 25, 2015
$65,000,000 5.38% Senior Notes, Series H, due August 25, 2017
$20,000,000 5.49% Senior Notes, Series I, due August 25, 2020
Dated as of August 25, 2005
TO THE PURCHASER LISTED IN THE ATTACHED
SCHEDULE A WHO IS A SIGNATORY HERETO:
Ladies and Gentlemen:
THE ST. JOE
COMPANY, a Florida corporation (the "Company"), agrees with you
as follows:
SECTION 1. AUTHORIZATION OF NOTES.
The Company will
authorize the issue and sale of (a) $65,000,000 aggregate
principal amount of its 5.28% Senior Notes,
Series G, due August 25, 2015 (the
"Series G Notes"), (b) $65,000,000
aggregate principal amount of its 5.38%
Senior Notes, Series H, due August 25, 2017
(the "Series H Notes") and (c)
$20,000,000 aggregate principal amount of
its 5.49% Senior Notes, Series I, due
August 25, 2020 (the "Series I Notes"; the
Series I Notes, the Series H Notes
and the Series G Notes being hereinafter
collectively referred to as the
"Notes," such term to include any such
notes issued in substitution therefor
pursuant to SECTION 13 of this Agreement or
the Other Agreements (as hereinafter
defined)). The Notes shall be substantially
in the form set out in EXHIBIT 1(A),
EXHIBIT 1(B) and EXHIBIT 1(C),
respectively, with such changes therefrom, if
any, as may be approved by you and the
Company. Certain capitalized terms used
in this Agreement are defined in SCHEDULE
B; references to a "Schedule" or an
"Exhibit" are, unless otherwise specified,
to a Schedule or an Exhibit attached
to this Agreement.
SECTION 2. SALE AND PURCHASE OF NOTES;
GUARANTY.
Section 2.1.
Purchase and Sale of Notes. Subject to the terms and
conditions of this Agreement, the Company
will issue and sell to you and you
will purchase from the Company, at the
Closing provided for in SECTION 3, Notes
in the principal amount and of the series
specified opposite your name in
SCHEDULE A at the purchase price of 100% of
the principal amount thereof.
Contemporaneously with entering into this
Agreement, the Company is entering
into separate Note Purchase Agreements (the
"Other Agreements") identical with
this Agreement with each of the other
purchasers named in SCHEDULE A (the "Other
Purchasers"), providing for the sale at
such Closing to each of the Other
Purchasers of Notes in the principal amount
and of the series specified opposite
its name in SCHEDULE A. Your obligation
hereunder, and the
<PAGE>
obligations of the Other Purchasers under
the Other Agreements, are several and
not joint obligations, and you shall have
no obligation under any Other
Agreement and no liability to any Person
for the performance or nonperformance
by any Other Purchaser thereunder.
Section 2.2.
Subsidiary Guaranty and Intercreditor Agreement. (a) The
payment by the Company of all amounts due
with respect to the Notes and the
performance by the Company of its
obligations under this Agreement and the Other
Agreements will be absolutely and
unconditionally guaranteed by the entities
identified on SCHEDULE 2.2(A) (together
with any additional Subsidiary who
delivers a guaranty pursuant to SECTION
9.8, the "Subsidiary Guarantors")
pursuant to the guaranty agreement
substantially in the form of EXHIBIT 2.2(A)
attached hereto and made a part hereof (as
the same may be amended, modified,
extended or renewed, the "Subsidiary
Guaranty").
(b) The Notes
will be entitled to the benefit of and will be secured by the
Second Amended and Restated Pledge
Agreement dated as of June 8, 2004 (as the
same may be further amended, supplemented,
restated or otherwise modified from
time to time, the "Pledge Agreement") by
and between St. Joe Finance Company, a
Florida corporation (the "Pledgor"), and
Wachovia Bank, National Association, as
collateral agent.
(c) The
enforcement of the rights and benefits in respect of the
Subsidiary
Guaranty and the Pledge Agreement and the
allocation of proceeds thereof shall
be subject to an intercreditor agreement
substantially in the form of EXHIBIT
2.2(C) attached hereto and made a part
hereof (as the same may be amended,
modified, extended or renewed, the
"Intercreditor Agreement").
(d) The holders
of the Notes acknowledge and agree that such holders will
discharge and release any Subsidiary
Guarantor from the Subsidiary Guaranty to
which it is a party pursuant to the written
request of the Company, provided
that (i) such Subsidiary Guarantor has been
released and discharged as an
obligor and guarantor under and in respect
of all Indebtedness of the Company
pursuant to the Bank Credit Agreement and
the Company so certifies to the
holders of the Notes in a certificate which
accompanies such request for release
and discharge, (ii) any such release and
discharge shall be expressly
conditioned upon receipt by the holders of
the Notes of a written agreement
executed by the Subsidiary Guarantor to be
released pursuant to which such
Subsidiary Guarantor shall agree that if,
for any reason whatsoever, it
thereafter becomes an obligor or guarantor
under and in respect of any
Indebtedness of the Company pursuant to the
Bank Credit Agreement, then such
Subsidiary Guarantor shall
contemporaneously provide written notice thereof to
the holders of the Notes accompanied by an
executed Subsidiary Guaranty of such
Subsidiary Guarantor, and (iii) at the time
of such release and discharge, the
Company shall deliver a certificate of a
Responsible Officer to the holders of
the Notes to the effect that no Default or
Event of Default exists.
(e) The Company
agrees that it will not, nor will it permit any Subsidiary
or any Affiliate which the Company controls
to, directly or indirectly, pay or
cause to be paid any consideration or
remuneration, whether by way of
supplemental or additional interest, fee or
otherwise, to any creditor of the
Company or any Subsidiary Guarantor, as the
case may be, as consideration for or
as an inducement to the entering into by
any such creditor of any release or
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<PAGE>
discharge of any Subsidiary Guarantor with
respect to any liability of such
Subsidiary Guarantor as an obligor or
guarantor under or in respect of
Indebtedness of the Company, unless such
consideration or remuneration is
concurrently paid, on the same terms,
ratably to the holders of all of the Notes
then outstanding.
(f) The holders
of the Notes acknowledge and agree that the Pledgor shall
be deemed discharged and released from the
Pledge Agreement upon the written
request of the Company, provided that (i)
the Agent agrees in writing for and on
behalf of itself and the lenders which are
parties to the Bank Credit Agreement
that the Pledge Agreement may be released
and discharged, which certification
shall accompany the Company's request for
such release and discharge, (ii) the
Collateral Agent (acting at the direction
of the Majority Creditors under the
Intercreditor Agreement) agrees in writing
for and on behalf of itself and the
Creditors (as defined in the Intercreditor
Agreement) that the Pledge Agreement
may be released and discharged, which
certification shall accompany the
Company's request for such release and
discharge, (iii) any such release and
discharge shall be expressly conditioned
upon receipt by the holders of the
Notes of a written agreement executed by
the Pledgor pursuant to which the
Pledgor shall agree that if, for any reason
whatsoever, it thereafter becomes a
pledgor in respect of any stock of, or
notes issued by, any Subsidiary of the
Company pursuant to the Bank Credit
Agreement, the 2002 Note Documentation or
the 2004 Note Documentation, then the
Company shall contemporaneously provide
written notice thereof to the holders of
the Notes accompanied by an executed
Pledge Agreement for the benefit of the
holders of the Notes equally and ratably
securing the holders of the Notes, the
Agent and lenders pursuant to the Bank
Credit Agreement, the holders of the 2002
Notes and the holders of the 2004
Notes, and (iv) at the time of such release
and discharge, the Company shall
deliver a certificate of a Responsible
Officer to the holders of the Notes to
the effect that no Default or Event of
Default exists.
SECTION 3. CLOSING.
The sale and
purchase of the Notes to be purchased by you and the Other
Purchasers shall occur at the offices of
Chapman and Cutler LLP, 111 West Monroe
Street, Chicago, Illinois 60603, at 10:00
a.m. Chicago time, at a closing (the
"Closing") on August 25, 2005. At the
Closing the Company will deliver to you
the Notes of the series to be purchased by
you in the form of a single Note (or
such greater number of Notes in
denominations of at least $100,000 as you may
request) dated the date of the Closing and
registered in your name (or in the
name of your nominee), against delivery by
you to the Company or its order of
immediately available funds in the amount
of the purchase price therefor by wire
transfer of immediately available funds for
the account of the Company to
account number 2112620925448 at Wachovia
Bank, National Association,
Jacksonville, Florida, ABA #063000021. If
at the Closing the Company shall fail
to tender such Notes to you as provided
above in this SECTION 3, or any of the
conditions specified in SECTION 4 shall not
have been fulfilled to your
satisfaction, you shall, at your election,
be relieved of all further
obligations under this Agreement, without
thereby waiving any rights you may
have by reason of such failure or such
nonfulfillment.
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<PAGE>
SECTION 4. CONDITIONS TO CLOSING.
Your obligation
to purchase and pay for the Notes to be sold to you at the
Closing is subject to the fulfillment to
your satisfaction, prior to or at the
Closing, of the following conditions:
Section 4.1.
Representations and Warranties. (a) The representations and
warranties of the Company in this Agreement
shall be correct when made and at
the time of the Closing.
(b) The
representations and warranties of each Subsidiary Guarantor in
the
Subsidiary Guaranty shall be correct when
made and at the time of Closing.
Section 4.2.
Performance; No Default. (a) The Company shall have performed
and complied with all agreements and
conditions contained in this Agreement
required to be performed or complied with
by it prior to or at the Closing, and
after giving effect to the issue and sale
of the Notes (and the application of
the proceeds thereof as contemplated by
SCHEDULE 5.14), no Default or Event of
Default shall have occurred and be
continuing. Neither the Company nor any
Subsidiary shall have entered into any
transaction since the date of the
Memorandum that would have been prohibited
by SECTION 10 hereof had such Section
applied since such date.
(b) Each
Subsidiary Guarantor shall have performed and complied with all
agreements and conditions contained in the
Subsidiary Guaranty required to be
performed and complied with by it prior to
or at the Closing, and after giving
effect to the issue and sale of Notes (and
the application of the proceeds
thereof as contemplated by SCHEDULE 5.14),
no Default or Event of Default shall
have occurred and be continuing.
Section 4.3.
Compliance Certificates.
(a) Officer's
Certificate. The Company shall have delivered to you an
Officer's Certificate, dated the date of
the Closing, certifying that the
conditions specified in SECTIONS 4.1(A),
4.2(A) and 4.9 have been fulfilled.
(b) Subsidiary
Guarantor Officer's Certificate. Each Subsidiary Guarantor
shall have delivered to you a certificate
of an authorized officer, dated the
date of the Closing, certifying that the
conditions set forth in SECTIONS
4.1(B), 4.2(B) and 4.9 have been
fulfilled.
(c) Secretary's
Certificate. The Company shall have delivered to you a
certificate certifying as to the true,
correct and complete resolutions attached
thereto and to other corporate proceedings
relating to the authorization,
execution and delivery of the Notes and the
Agreements.
(d) Subsidiary
Guarantor Secretary's Certificate. Each Subsidiary Guarantor
shall have delivered to you a certificate
certifying as to the true, correct and
complete resolutions attached thereto and
to other corporate proceedings
relating to the authorization, execution
and delivery of the Subsidiary
Guaranty.
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Section 4.4.
Opinions of Counsel. You shall have received opinions in form
and substance satisfactory to you, dated
the date of the Closing (a) from Foley
& Lardner LLP or internal counsel for
the Company and the Subsidiary Guarantors,
covering the matters set forth in EXHIBIT
4.4(A) and covering such other matters
incident to the transactions contemplated
hereby as you or your counsel may
reasonably request (and the Company and
Subsidiary Guarantors hereby instruct
its counsel to deliver such opinion to you)
and (b) from Chapman and Cutler LLP,
your special counsel in connection with
such transactions, substantially in the
form set forth in EXHIBIT 4.4(B) and
covering such other matters incident to
such transactions as you may reasonably
request.
Section 4.5.
Purchase Permitted by Applicable Law, Etc. On the date of the
Closing your purchase of Notes shall (a) be
permitted by the laws and
regulations of each jurisdiction to which
you are subject, without recourse to
provisions (such as Section 1405(a)(8) of
the New York Insurance Law) permitting
limited investments by insurance companies
without restriction as to the
character of the particular investment, (b)
not violate any applicable law or
regulation (including, without limitation,
Regulation T, U or X of the Board of
Governors of the Federal Reserve System)
and (c) not subject you to any tax,
penalty or liability under or pursuant to
any applicable law or regulation,
which law or regulation was not in effect
on the date hereof. If requested by
you, you shall have received an Officer's
Certificate certifying as to such
matters of fact as you may reasonably
specify to enable you to determine whether
such purchase is so permitted.
Section 4.6.
Sale of Other Notes. Contemporaneously with the Closing, the
Company shall sell to the Other Purchasers,
and the Other Purchasers shall
purchase, the Notes to be purchased by them
at the Closing as specified in
SCHEDULE A.
Section 4.7.
Payment of Special Counsel Fees. Without limiting the
provisions of SECTION 15.1, the Company
shall have paid on or before the Closing
the fees, charges and disbursements of your
special counsel referred to in
SECTION 4.4 to the extent reflected in a
statement of such counsel rendered to
the Company at least one Business Day prior
to the Closing.
Section 4.8.
Private Placement Number. A Private Placement Number issued by
Standard & Poor's CUSIP Service Bureau
(in cooperation with the Securities
Valuation Office of the National
Association of Insurance Commissioners) shall
have been obtained for each series of the
Notes.
Section 4.9.
Changes in Corporate Structure. Except as specified in
SCHEDULE 4.9, the Company and the
Subsidiary Guarantors shall not have changed
their respective jurisdiction of
incorporation or been a party to any merger or
consolidation and shall not have succeeded
to all or any substantial part of the
liabilities of any other entity, at any
time following the date of the most
recent financial statements referred to in
SCHEDULE 5.5.
Section 4.10.
Consent. You shall have received true, correct and complete
copies, certified by a Responsible Officer
of the Company of: (a) the Bank
Credit Agreement, (b) the Pledge Agreement
and (c) any necessary amendments,
consents or waivers to each of the Bank
-5-
<PAGE>
Credit Agreement, the Pledge Agreement and
the Intercreditor Agreement to permit
the issuance and sale of the Notes with the
benefit of the Intercreditor
Agreement.
Section 4.11.
Subsidiary Guaranty, Etc. The Subsidiary Guaranty, the Pledge
Agreement and the Intercreditor Agreement
shall be in full force and effect and
shall constitute the legal, valid and
binding obligations of all of the parties
thereto.
Section 4.12.
Funding Instructions. At least three Business Days prior to
the date of the Closing, you shall have
received written instructions executed
by a Responsible Officer of the Company
directing the manner of the payment of
funds and setting forth (a) the name and
address of the transferee bank, (b)
such transferee bank's ABA number, (c) the
account name and number into which
the purchase price for the Notes is to be
deposited, and (d) the name and
telephone number of the account
representative responsible for verifying receipt
of such funds.
Section 4.13.
Proceedings and Documents. All corporate and other
proceedings in connection with the
transactions contemplated by this Agreement
and all documents and instruments incident
to such transactions shall be
satisfactory to you and your special
counsel, and you and your special counsel
shall have received all such counterpart
originals or certified or other copies
of such documents as you or they may
reasonably request.
SECTION 5. REPRESENTATIONS AND WARRANTIES
OF THE COMPANY.
The Company
represents and warrants to you that:
Section 5.1.
Organization; Power and Authority. The Company is a
corporation duly organized, validly
existing and in good standing under the laws
of its jurisdiction of incorporation, and
is duly qualified as a foreign
corporation and is in good standing in each
jurisdiction in which such
qualification is required by law, other
than those jurisdictions as to which the
failure to be so qualified or in good
standing could not, individually or in the
aggregate, reasonably be expected to have a
Material Adverse Effect. The Company
has the corporate power and authority to
own or hold under lease the properties
it purports to own or hold under lease, to
transact the business it transacts
and proposes to transact, to execute and
deliver this Agreement and the Other
Agreements and the Notes and to perform the
provisions hereof and thereof.
Section 5.2.
Authorization, Etc. This Agreement, the Other Agreements and
the Notes have been duly authorized by all
necessary corporate action on the
part of the Company, and this Agreement
constitutes, and upon execution and
delivery thereof each Note will constitute,
a legal, valid and binding
obligation of the Company enforceable
against the Company in accordance with its
terms, except as such enforceability may be
limited by (a) applicable
bankruptcy, insolvency, reorganization,
moratorium or other similar laws
affecting the enforcement of creditors'
rights generally and (b) general
principles of equity (regardless of whether
such enforceability is considered in
a proceeding in equity or at law).
Section 5.3.
Disclosure. The Company, through its agent, Wachovia
Securities, has prior to the date hereof
delivered to you and each Other
Purchaser a copy of a Private Placement
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Memorandum dated July 12, 2005 (the
"Memorandum"), as supplemented by the
Company's Quarterly Report on Form 10-Q for
the quarter ending June 30, 2005,
relating to the transactions contemplated
hereby. The Memorandum fairly
describes, in all material respects, the
general nature of the business and
principal properties of the Company and its
Subsidiaries. This Agreement, the
Memorandum, the documents, certificates or
other writings delivered to you by or
on behalf of the Company in connection with
the transactions contemplated hereby
and the financial statements listed in
SCHEDULE 5.5, taken as a whole, do not
contain any untrue statement of a material
fact or omit to state any material
fact necessary to make the statements
therein not misleading in light of the
circumstances under which they were made.
Since December 31, 2004, there has
been no change in the financial condition,
operations, business or properties of
the Company or any Subsidiary except
changes that individually or in the
aggregate could not reasonably be expected
to have a Material Adverse Effect.
There is no fact known to the Company that
could reasonably be expected to have
a Material Adverse Effect that has not been
set forth herein or in the
Memorandum or in the other documents,
certificates and other writings delivered
to you by or on behalf of the Company
specifically for use in connection with
the transactions contemplated hereby.
Section 5.4.
Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) SCHEDULE 5.4 contains
(except as noted therein) complete and
correct lists (i) of the Company's
Subsidiaries, showing, as to each Subsidiary,
the correct name thereof, the jurisdiction
of its organization, and the
percentage of shares of each class of its
capital stock or similar equity
interests outstanding owned by the Company
and each other Subsidiary, (ii) of
the Company's Affiliates, other than
Subsidiaries, and (iii) of the Company's
directors and senior officers.
(b) All of the
outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in
SCHEDULE 5.4 as being owned by the Company
and its Subsidiaries have been validly
issued, are fully paid and nonassessable
and are owned by the Company or another
Subsidiary free and clear of any Lien
(except as otherwise disclosed in SCHEDULE
5.4).
(c) Each
Subsidiary identified in SCHEDULE 5.4 is a corporation or other
legal entity duly organized, validly
existing and in good standing under the
laws of its jurisdiction of organization,
and is duly qualified as a foreign
corporation or other legal entity and is in
good standing in each jurisdiction
in which such qualification is required by
law, other than those jurisdictions
as to which the failure to be so qualified
or in good standing could not,
individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has
the corporate or other power and
authority to own or hold under lease the
properties it purports to own or hold
under lease and to transact the business it
transacts and proposes to transact.
(d) No
Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement (other than
this Agreement, the agreements listed
on SCHEDULE 5.4 and customary limitations
imposed by corporate law statutes)
restricting the ability of such Subsidiary
to pay dividends out of profits or
make any other similar distributions of
profits to the Company or any of its
Subsidiaries that owns outstanding shares
of capital stock or similar equity
interests of such Subsidiary.
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Section 5.5.
Financial Statements. The Company has delivered to each
Purchaser copies of the financial
statements of the Company and its Subsidiaries
listed on SCHEDULE 5.5. All of said
financial statements (including in each case
the related schedules and notes) fairly
present in all material respects the
consolidated financial position of the
Company and its Subsidiaries as of the
respective dates specified in such
financial statements and the consolidated
results of their operations and cash flows
for the respective periods so
specified and have been prepared in
accordance with GAAP consistently applied
throughout the periods involved except as
set forth in the notes thereto
(subject, in the case of any interim
financial statements, to normal year-end
adjustments).
Section 5.6.
Compliance with Laws, Other Instruments, Etc. The execution,
delivery and performance by the Company of
this Agreement and the Notes will not
(a) contravene, result in any breach of, or
constitute a default under, or
result in the creation of any Lien in
respect of any property of the Company or
any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter
or by-laws, or any other agreement or
instrument to which the Company or any
Subsidiary is bound or by which the
Company or any Subsidiary or any of their
respective properties may be bound or
affected, (b) conflict with or result in a
breach of any of the terms,
conditions or provisions of any order,
judgment, decree, or ruling of any court,
arbitrator or Governmental Authority
applicable to the Company or any Subsidiary
or (c) violate any provision of any statute
or other rule or regulation of any
Governmental Authority applicable to the
Company or any Subsidiary.
Section 5.7.
Governmental Authorizations, Etc. No consent, approval or
authorization of, or registration, filing
or declaration with, any Governmental
Authority is required in connection with
the execution, delivery or performance
by the Company of this Agreement or the
Notes, except for routine filings by the
Company under the Exchange Act to comply
with reporting obligations thereunder.
Section 5.8.
Litigation; Observance of Agreements, Statutes and Orders. (a)
There are no actions, suits or proceedings
pending or, to the knowledge of the
Company, threatened against or affecting
the Company or any Subsidiary or any
property of the Company or any Subsidiary
in any court or before any arbitrator
of any kind or before or by any
Governmental Authority that, individually or in
the aggregate, could reasonably be expected
to have a Material Adverse Effect.
(b) Neither the
Company nor any Subsidiary is in default under any term of
any agreement or instrument to which it is
a party or by which it is bound, or
any order, judgment, decree or ruling of
any court, arbitrator or Governmental
Authority or is in violation of any
applicable law, ordinance, rule or
regulation (including without limitation
Environmental Laws) of any Governmental
Authority, which default or violation,
individually or in the aggregate, could
reasonably be expected to have a Material
Adverse Effect.
Section 5.9.
Taxes. The Company and its Subsidiaries have filed all tax
returns that are required to have been
filed in any jurisdiction, and have paid
all taxes shown to be due and payable on
such returns and all other taxes and
assessments levied upon them or their
properties, assets, income or franchises,
to the extent such taxes and assessments
have become due and payable and before
they have become delinquent, except for any
taxes and assessments (a) the
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<PAGE>
amount of which is not individually or in
the aggregate Material or (b) the
amount, applicability or validity of which
is currently being contested in good
faith by appropriate proceedings and with
respect to which the Company or a
Subsidiary, as the case may be, has
established adequate reserves in accordance
with GAAP. The Company knows of no basis
for any other tax or assessment that
could reasonably be expected to have a
Material Adverse Effect. The charges,
accruals and reserves on the books of the
Company and its Subsidiaries in
respect of Federal, state or other taxes
for all fiscal periods are adequate.
The Federal income tax liabilities of the
Company and its Subsidiaries which
join in the filing of the Company's federal
income tax return have been
determined by the Internal Revenue Service
and paid for all fiscal years up to
and including the fiscal year ended
December 31, 1999. The Federal tax returns
of the Company and its Subsidiaries for the
fiscal years ended December 31,
2000, 2001, 2002 and 2003 have been
submitted to the Internal Revenue Service
though their audits have not been
completed.
Section 5.10.
Title to Property; Leases. The Company and its Subsidiaries
have good and sufficient title to their
respective properties that individually
or in the aggregate are Material, including
all such properties reflected in the
most recent audited balance sheet referred
to in SECTION 5.5 or purported to
have been acquired by the Company or any
Subsidiary after said date (except as
sold or otherwise disposed of since such
date for fair value), in each case free
and clear of Liens prohibited by this
Agreement. All leases that individually or
in the aggregate are Material are valid and
subsisting and are in full force and
effect in all material respects.
Section 5.11.
Licenses, Permits, Etc. Except as disclosed in SCHEDULE 5.11,
(a) the Company and its Subsidiaries own or possess all
licenses,
permits,
franchises, authorizations, patents, copyrights, service marks,
trademarks and
trade names, or rights thereto, that individually or in the
aggregate are
Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product or service of
the
Company or any
of its Subsidiaries infringes any license, permit,
franchise,
authorization, patent, copyright, service mark, trademark,
trade
name or other
right owned by any other Person where the infringement,
individually or
in the aggregate, would be likely to result in a Material
Adverse Effect;
and
(c) to the best knowledge of the Company, there is no violation by
any
Person of any
right of the Company or any of its Subsidiaries with respect
to any patent,
copyright, service mark, trademark, trade name or other
right owned or
used by the Company or any of its Subsidiaries where the
violation,
individually or in the aggregate, would be likely to result in
a
Material Adverse
Effect.
Section 5.12.
Compliance with ERISA. (a) The Company and each ERISA
Affiliate have operated and administered
each Plan in compliance with all
applicable laws except for such instances
of noncompliance as have not resulted
in and could not reasonably be expected to
result in a Material Adverse Effect.
Neither the Company nor any ERISA Affiliate
has incurred any liability pursuant
to Title I or IV of ERISA or the penalty or
excise tax provisions of the Code
relating to employee benefit plans (as
defined in Section 3 of ERISA), and no
event,
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<PAGE>
transaction or condition has occurred or
exists that could reasonably be
expected to result in the incurrence of any
such liability by the Company or any
ERISA Affiliate, or in the imposition of
any Lien on any of the rights,
properties or assets of the Company or any
ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to
such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the
Code, other than such liabilities or
Liens as would not be individually or in
the aggregate Material.
(b) The present
value of the aggregate benefit liabilities under each of
the Plans (other than Multiemployer Plans),
determined as of the end of such
Plan's most recently ended plan year on the
basis of the actuarial assumptions
specified for funding purposes in such
Plan's most recent actuarial valuation
report, did not exceed the aggregate
current value of the assets of such Plan
allocable to such benefit liabilities. The
term "benefit liabilities" has the
meaning specified in Section 4001 of ERISA
and the terms "current value" and
"present value" have the meaning specified
in Section 3 of ERISA.
(c) The Company
and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to
contingent withdrawal liabilities) under
Section 4201 or 4204 of ERISA in respect of
Multiemployer Plans that
individually or in the aggregate are
Material.
(d) The expected
post-retirement benefit obligation (determined as of the
last day of the Company's most recently
ended fiscal year in accordance with
Financial Accounting Standards Board
Statement No. 106, without regard to
liabilities attributable to continuation
coverage mandated by Section 4980B of
the Code) of the Company and its
Subsidiaries is not Material.
(e) The
execution and delivery of this Agreement and the issuance and
sale
of the Notes hereunder will not involve any
transaction that is subject to the
prohibitions of Section 406 of ERISA or in
connection with which a tax could be
imposed pursuant to Section
4975(c)(1)(A)-(D) of the Code. The representation by
the Company in the first sentence of this
SECTION 5.12(E) is made in reliance
upon and subject to the accuracy of your
representation in SECTION 6.2 as to the
sources of the funds used to pay the
purchase price of the Notes to be purchased
by you.
Section 5.13.
Private Offering by the Company. Neither the Company nor
anyone acting on its behalf has offered the
Notes, the Subsidiary Guaranty or
any similar securities for sale to, or
solicited any offer to buy any of the
same from, or otherwise approached or
negotiated in respect thereof with, any
Person other than you, the Other Purchasers
and not more than 55 other
Institutional Investors, each of which has
been offered the Notes at a private
sale for investment. Neither the Company
nor anyone acting on its behalf has
taken, or will take, any action that would
subject the issuance or sale of the
Notes or the Subsidiary Guaranty to the
registration requirements of Section 5
of the Securities Act.
Section 5.14.
Use of Proceeds; Margin Regulations. The Company will apply
the proceeds of the sale of the Notes as
set forth in SCHEDULE 5.14. No part of
the proceeds from the sale of the Notes
hereunder will be used, directly or
indirectly, for the purpose of buying or
carrying any margin stock within the
meaning of Regulation U of the Board of
Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying
or carrying or trading in any
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<PAGE>
securities under such circumstances as to
involve the Company in a violation of
Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a
violation of Regulation T of said Board (12
CFR 220). Margin stock does not
constitute more than 2% of the value of the
consolidated assets of the Company
and its Subsidiaries and the Company does
not have any present intention that
margin stock will constitute more than 2%
of the value of such assets. As used
in this Section, the terms "margin stock"
and "purpose of buying or carrying"
shall have the meanings assigned to them in
said Regulation U.
Section 5.15.
Existing Indebtedness; Future Liens. (a) SCHEDULE 5.15 sets
forth a complete and correct list of all
outstanding Indebtedness of the Company
and its Subsidiaries as of August 19, 2005,
since which date there have been no
Material changes in the amounts, interest
rates, sinking funds, installment
payments or maturities of the Indebtedness
of the Company or any Subsidiary.
Neither the Company nor any Subsidiary is
in default and no waiver of default is
currently in effect, in the payment of any
principal or interest on any
Indebtedness of the Company or such
Subsidiary and no event or condition exists
with respect to any Indebtedness of the
Company or any Subsidiary that would
permit (or that with notice or the lapse of
time, or both, would permit) one or
more Persons to cause such Indebtedness to
become due and payable before its
stated maturity or before its regularly
scheduled dates of payment.
(b) Except as
disclosed in SCHEDULE 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause
or permit in the future (upon the
happening of a contingency or otherwise)
any of its property, whether now owned
or hereafter acquired, to be subject to a
Lien not permitted by SECTION 10.6.
Section 5.16.
Foreign Assets Control Regulations, Etc. (a) Neither the sale
of the Notes by the Company hereunder nor
its use of the proceeds thereof will
violate the Trading with the Enemy Act, as
amended, or any of the foreign assets
control regulations of the United States
Treasury Department (31 CFR, Subtitle
B, Chapter V, as amended) or any enabling
legislation or executive order
relating thereto.
(b) Neither the
Company nor any Subsidiary (i) is, or will become, a Person
described or designated in the Specially
Designated Nationals and Blocked
Persons List of the Office of Foreign
Assets Control or in Section 1 of the
Anti-Terrorism Order or (ii) engages or
will engage in any dealings or
transactions, or is or will be otherwise
associated, with any such Person. The
Company and its Subsidiaries are in
compliance, in all material respects, with
the USA Patriot Act.
(c) No part of
the proceeds from the sale of the Notes hereunder will be
used, directly or indirectly, for any
payments to any governmental official or
employee, political party, official of a
political party, candidate for
political office, or anyone else acting in
an official capacity, in order to
obtain, retain or direct business or obtain
any improper advantage, in violation
of the United States Foreign Corrupt
Practices Act of 1977, as amended, assuming
in all cases that such Act applies to the
Company.
Section 5.17.
Status under Certain Statutes. Neither the Company nor any
Subsidiary is an "investment company"
registered or required to be registered or
subject to regulation under
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<PAGE>
the Investment Company Act of 1940, as
amended, or is subject to regulation
under the Public Utility Holding Company
Act of 1935, as amended, the ICC
Termination Act of 1995, as amended, or the
Federal Power Act, as amended.
Section 5.18.
Notes Rank Pari Passu. The obligations of the Company under
this Agreement and the Notes rank at least
pari passu in right of payment with
all other Senior Indebtedness (actual or
contingent) of the Company, including,
without limitation, all Senior Indebtedness
of the Company described in SCHEDULE
5.15 hereto.
Section 5.19.
Environmental Matters. Neither the Company nor any Subsidiary
has knowledge of any claim or has received
any notice of any claim, and no
proceeding has been instituted raising any
claim against the Company or any of
its Subsidiaries or any of their respective
real properties now or formerly
owned, leased or operated by any of them or
other assets, alleging any damage to
the environment or violation of any
Environmental Laws, except, in each case,
such as could not reasonably be expected to
result in a Material Adverse Effect.
(a) Neither the
Company nor any Subsidiary has knowledge of any facts which
would give rise to any claim, public or
private, of violation of Environmental
Laws or damage to the environment emanating
from, occurring on or in any way
related to real properties now or formerly
owned, leased or operated by any of
them or to other assets or their use,
except, in each case, such as could not
reasonably be expected to result in a
Material Adverse Effect.
(b) Neither the
Company nor any of its Subsidiaries has stored any
Hazardous Materials on real properties now
or formerly owned, leased or operated
by any of them nor has disposed of any
Hazardous Materials in a manner contrary
to any Environmental Laws in each case in
any manner that could reasonably be
expected to result in a Material Adverse
Effect.
(c) All
buildings on all real properties now owned, leased or operated
by
the Company or any of its Subsidiaries are
in compliance with applicable
Environmental Laws, except where failure to
comply could not reasonably be
expected to result in a Material Adverse
Effect.
SECTION 6. REPRESENTATIONS OF THE
PURCHASER.
Section 6.1.
Purchase for Investment. (a) You represent that you are
purchasing the Notes for your own account
or for one or more separate accounts
maintained by you or for the account of one
or more pension or trust funds and
not with a view to the distribution
thereof; provided that the disposition of
your or their property shall at all times
be within your or their control. In
addition, you represent that you are an
institutional accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or
(7) under the Securities Act. You
understand that the Notes have not been
registered under the Securities Act and
may be resold only if registered pursuant
to the provisions of the Securities
Act or if an exemption from registration is
available, except under
circumstances where neither such
registration nor such an exemption is required
by law, and that the Company is not
required to register the Notes.
(b) You
acknowledge that you have received such information concerning
the
Company and the Notes and have been given
the opportunity to ask such questions
of and
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<PAGE>
receive answers from representatives of the
Company as you deem sufficient,
based on information provided by the
Company to you, to make an informed
investment decision with respect to the
Notes.
Section 6.2.
Source of Funds. You represent that at least one of the
following statements is an accurate
representation as to each source of funds (a
"Source") to be used by you to pay the
purchase price of the Notes to be
purchased by you hereunder:
(a) the Source is an "insurance company general account" (as the
term
is defined in
the United States Department of Labor's Prohibited
Transaction
Exemption ("PTE") 95-60) in respect of which the reserves and
liabilities (as
defined by the annual statement for life insurance
companies
approved by the National Association of Insurance Commissioners
(the "NAIC
Annual Statement")) for the general account contract(s) held by
or on behalf of
any employee benefit plan together with the amount of the
reserves and
liabilities for the general account contract(s) held by or on
behalf of any
other employee benefit plans maintained by the same employer
(or affiliate
thereof as defined in PTE 95-60) or by the same employee
organization in
the general account do not exceed 10% of the total reserves
and liabilities
of the general account (exclusive of separate account
liabilities)
plus surplus as set forth in the NAIC Annual Statement filed
with your state
of domicile; or
(b) the Source is a separate account that is maintained solely
in
connection with
such Purchaser's fixed contractual obligations under which
the amounts
payable, or credited, to any employee benefit plan (or its
related trust)
that has any interest in such separate account (or to any
participant or
beneficiary of such plan (including any annuitant)) are not
affected in any
manner by the investment performance of the separate
account; or
(c) the Source is either (i) an insurance company pooled
separate
account, within
the meaning of PTE 90-1 or (ii) a bank collective
investment fund,
within the meaning of the PTE 91-38 and, except as
disclosed by you
to the Company in writing pursuant to this clause (c), no
employee benefit
plan or group of plans maintained by the same employer or
employee
organization beneficially owns more than 10% of all assets
allocated to
such pooled separate account or collective investment fund; or
(d) the Source constitutes assets of an "investment fund" (within
the
meaning of Part
V of PTE 84-14 (the "QPAM Exemption")) managed by a
"qualified
professional asset manager" or "QPAM" (within the meaning of
Part V of the
QPAM Exemption), no employee benefit plan's assets that are
included in such
investment fund, when combined with the assets of all
other employee
benefit plans established or maintained by the same employer
or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM
Exemption) of
such employer or by the same employee organization and
managed by such
QPAM, exceed 20% of the total client assets managed by such
QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are
satisfied,
neither the QPAM nor a person controlling or controlled by the
QPAM (applying
the definition of "control" in Section V(e) of the QPAM
Exemption) owns
a 5% or more interest in the Company
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<PAGE>
and (i) the
identity of such QPAM and (ii) the names of all employee
benefit plans
whose assets are included in such investment fund have been
disclosed to the
Company in writing pursuant to this clause (d); or
(e) the Source constitutes assets of a "plan(s)" (within the
meaning
of Section IV of
PTE 96-23 (the "INHAM Exemption")) managed by an "in-house
asset manager"
or "INHAM" (within the meaning of Part IV of the INHAM
exemption), the
conditions of Part I(a), (g) and (h) of the INHAM Exemption
are satisfied,
neither the INHAM nor a person controlling or controlled by
the INHAM
(applying the definition of "control" in Section IV(h) of the
INHAM Exemption)
owns a 5% or more interest in the Company and (i) the
identity of such
INHAM and (ii) the name(s) of the employee benefit plan(s)
whose assets
constitute the Source have been disclosed to the Company in
writing pursuant
to this clause (e); or
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a
separate
account or trust
fund comprised of one or more employee benefit plans, each
of which has
been identified to the Company in writing pursuant to this
clause (g);
or
(h) the Source does not include assets of any employee benefit
plan,
other than a
plan exempt from the coverage of ERISA.
As used in this
SECTION 6.2, the terms "employee benefit plan",
"governmental plan", "party in interest"
and "separate account" shall have the
respective meanings assigned to such terms
in Section 3 of ERISA.
SECTION 7. INFORMATION AS TO THE
COMPANY.
Section 7.1.
Financial and Business Information. The Company shall deliver
to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of
each
quarterly fiscal
period in each fiscal year of the Company (other than the
last quarterly
fiscal period of each such fiscal year), duplicate copies
of:
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of income, changes in
shareholders'
equity and cash flows of the Company and its Subsidiaries for
such
quarter and (in the case of the second and third quarters) for
the
portion of the fiscal year ending with such quarter,
setting forth in each case in comparative
form the figures for the corresponding
periods in the previous fiscal year, all in
reasonable detail, prepared in
accordance with GAAP applicable to
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<PAGE>
quarterly financial statements generally,
and certified by a Senior Financial
Officer as fairly presenting, in all
material respects, the financial position
of the companies being reported on and
their results of operations and cash
flows, subject to changes resulting from
year-end adjustments; provided that
delivery within the time period specified
above of copies of the Company's
Quarterly Report on Form 10-Q prepared in
compliance with the requirements
therefor and filed with the Securities and
Exchange Commission shall be deemed
to satisfy the requirements of this SECTION
7.1(A);
(b) Annual Statements -- within 105 days after the end of each
fiscal
year of the
Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of income, changes in
shareholders'
equity and cash flows of the Company and its Subsidiaries, for
such
year,
setting forth in
each case in comparative form the figures for the previous
fiscal year, all
in reasonable detail, prepared in accordance with GAAP,
and accompanied
by:
(1) an opinion thereon of independent certified public
accountants of recognized national standing, which opinion
shall
state that such financial statements present fairly, in all
material respects, the financial position of the companies
being
reported upon and their results of operations and cash flows
and
have been prepared in conformity with GAAP, and that the
examination of such accountants in connection with such
financial
statements has been made in accordance with generally accepted
auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and
(2) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making
their audit, they have become aware of any condition or event
that then constitutes a Default or an Event of Default, and, if
they are aware that any such condition or event then exists,
specifying the nature and period of the existence thereof (it
being understood that such accountants shall not be liable,
directly or indirectly, for any failure to obtain knowledge of
any Default or Event of Default unless such accountants should
have obtained knowledge thereof in making an audit in
accordance
with generally accepted auditing standards or did not make such
an audit),
provided that
the delivery within the time period specified above of the
Company's Annual
Report on Form 10-K for such fiscal year (together with
the Company's
annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under
the Exchange Act) prepared in accordance with the
requirements
therefor and filed with the Securities and
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<PAGE>
Exchange
Commission, together with the accountant's certificate
described
in clause (2)
above, shall be deemed to satisfy the requirements of this
SECTION
7.1(B);
(c) SEC and Other Reports -- promptly upon their becoming
available,
one copy of (i)
each financial statement, report, notice or proxy statement
sent by the
Company or any Subsidiary to public securities holders
generally, and
(ii) each regular or periodic report, each registration
statement
(without exhibits except as expressly requested by such
holder),
and each
prospectus and all amendments thereto filed by the Company or
any
Subsidiary with
the Securities and Exchange Commission and of all press
releases and
other statements made available generally by the Company or
any Subsidiary
to the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in
any
event within
five days after a Responsible Officer becoming aware of the
existence of any
Default or Event of Default or that any Person has given
any notice or
taken any action with respect to a claimed default hereunder
or that any
Person has given any notice or taken any action with respect to
a claimed
default of the type referred to in SECTION 11(F), a written
notice
specifying the nature and period of existence thereof and what
action the
Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five days
after
a Responsible
Officer becoming aware of any of the following, a written
notice setting
forth the nature thereof and the action, if any, that the
Company or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as defined
in
Section 4043(c) of ERISA and the regulations thereunder, for
which
notice thereof has not been waived pursuant to such regulations as
in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings
under
Section 4042 of ERISA for the termination of, or the appointment of
a
trustee to administer, any Plan, or the receipt by the Company or
any
ERISA Affiliate of a notice from a Multiemployer Plan that such
action
has been taken by the PBGC with respect to such Multiemployer Plan;
or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA
Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in
the
imposition of any Lien on any of the rights, properties or assets
of
the Company or any ERISA Affiliate pursuant to Title I or IV of
ERISA
or such penalty or excise tax provisions, if such liability or
Lien,
taken together with any other such liabilities or Liens then
existing,
could reasonably be expected to have a Material Adverse Effect;
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(f) Notices from Governmental Authority -- promptly, and in any
event
within 30 days
of receipt thereof, copies of any notice to the Company or
any Subsidiary
from any Federal or state Governmental Authority relating to
any order,
ruling, statute or other law or regulation that could
reasonably
be expected to
have a Material Adverse Effect; and
(g) Requested Information -- with reasonable promptness, such
other
data and
information relating to the business, operations, affairs,
financial
condition, assets or properties of the Company or any of its
Subsidiaries or
relating to the ability of the Company to perform its
obligations
hereunder and under the Notes as from time to time may be
reasonably
requested by any such holder of Notes, including without
limitation, such
information as is required by Rule 144A under the
Securities Act
to be delivered to the prospective transferee of the Notes.
Section 7.2. Officer's
Certificate. Each set of financial statements
delivered to a holder of Notes pursuant to
SECTION 7.1(A) or SECTION 7.1(B)
hereof shall be accompanied by a
certificate of a Senior Financial Officer
setting forth:
(a) Covenant Compliance -- (1) the information (including
detailed
calculations)
required in order to establish whether the Company was in
compliance with
the requirements of SECTION 10.1 through SECTION 10.7
hereof,
inclusive, during the quarterly or annual period covered by the
statements then
being furnished (including with respect to each such
Section, where
applicable, the calculations of the maximum or minimum
amount, ratio or
percentage, as the case may be, permissible under the
terms of such
Sections, and the calculation of the amount, ratio or
percentage then
in existence) and (2) the information required in order to
establish
whether the Company was in compliance with the requirements of
SECTION 9.8
hereof during the quarterly or annual period covered by the
statements then
being furnished (including with respect to such Section, a
list of each of
the existing Subsidiary Guarantors and their respective
jurisdictions of
organization); and
(b) Event of Default -- a statement that such officer has reviewed
the
relevant terms
hereof and has made, or caused to be made, under his or her
supervision, a
review of the transactions and conditions of the Company and
its Subsidiaries
from the beginning of the quarterly or annual period
covered by the
statements then being furnished to the date of the
certificate and
that such review shall not have disclosed the existence
during such
period of any condition or event that constitutes a Default or
an Event of
Default or, if any such condition or event existed or exists
(including,
without limitation, any such event or condition resulting from
the failure of
the Company or any Subsidiary to comply with any
Environmental
Law), specifying the nature and period of existence thereof
and what action
the Company shall have taken or proposes to take with
respect
thereto.
Section 7.3.
Inspection. The Company shall permit the representatives of
each holder of Notes that is an
Institutional Investor:
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(a) No Default -- if no Default or Event of Default then exists,
at
the expense of
such holder and upon reasonable prior notice to the Company,
to visit the
principal executive office of the Company, to discuss the
affairs,
finances and accounts of the Company and its Subsidiaries with
the
Company's Senior
Financial Officers, and (with the Company's participation
and consent,
which consent will not be unreasonably withheld) its
independent
public accountants, and (with the consent of the Company, which
consent will not
be unreasonably withheld) to visit the other offices and
properties of
the Company and each Subsidiary, all at such reasonable times
and as often as
may be reasonably requested in writing; and
(b) Default -- if a Default or Event of Default then exists, at
the
expense of the
Company, to visit and inspect any of the offices or
properties of
the Company or any Subsidiary, to examine all their
respective books
of account, records, reports and other papers, to make
copies and
extracts therefrom, and to discuss their respective affairs,
finances and
accounts with their respective officers and independent public
accountants (and
by this provision the Company authorizes said accountants
to discuss the
affairs, finances and accounts of the Company and its
Subsidiaries),
all at such times and as often as may be requested.
SECTION 8. PREPAYMENT OF THE NOTES.
Section 8.1.
Required Prepayments. No regularly scheduled prepayment of the
principal of any series of the Notes is
required prior to the final maturity
date thereof.
Section 8.2.
Optional Prepayments with Make-Whole Amount. The Company may,
at its option, upon notice as provided
below, prepay at any time all, or from
time to time any part of, the Notes, in an
amount not less than 10% of the
aggregate principal amount of the Notes
then outstanding in the case of a
partial prepayment (but if in the case of a
partial prepayment, then against
each series of Notes in proportion to the
aggregate principal amount outstanding
on each series), at 100% of the principal
amount so prepaid, together with
interest accrued thereon to the date of
such prepayment, plus the Make-Whole
Amount determined for the prepayment date
with respect to such principal amount.
The Company will give each holder of Notes
written notice of each optional
prepayment under this SECTION 8.2 not less
than 30 days and not more than 60
days prior to the date fixed for such
prepayment. Each such notice shall specify
such date, the aggregate principal amount
of each series of the Notes to be
prepaid on such date, the principal amount
of each Note held by such holder to
be prepaid (determined in accordance with
SECTION 8.4), and the interest to be
paid on the prepayment date with respect to
such principal amount being prepaid,
and shall be accompanied by a certificate
of a Senior Financial Officer as to
the estimated Make-Whole Amount due in
connection with such prepayment
(calculated as if the date of such notice
were the date of the prepayment),
setting forth the details of such
computation. Two Business Days prior to such
prepayment, the Company shall deliver to
each holder of Notes a certificate of a
Senior Financial Officer specifying the
calculation of such Make-Whole Amount as
of the specified prepayment date.
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Section 8.3.
Change in Control.
(a) Notice of
Change in Control or Control Event. The Company will, within
five Business Days after any Responsible
Officer has knowledge of the occurrence
of any Change in Control or Control Event,
give written notice of such Change in
Control or Control Event to each holder of
Notes unless notice in respect of
such Change in Control (or the Change in
Control contemplated by such Control
Event) shall have been given pursuant to
subparagraph (B) of this SECTION 8.3.
If a Change in Control has occurred, such
notice shall contain and constitute an
offer to prepay Notes as described in
subparagraph (C) of this SECTION 8.3 and
shall be accompanied by the certificate
described in subparagraph (G) of this
SECTION 8.3.
(b) Condition to
Company Action. The Company will not take any action that
consummates or finalizes a Change in
Control unless (i) at least 30 days prior
to such action it shall have given to each
holder of Notes written notice
containing and constituting an offer to
prepay Notes as described in
subparagraph (C) of this SECTION 8.3,
accompanied by the certificate described
in subparagraph (G) of this SECTION 8.3,
and (ii) contemporaneously with such
action, it prepays all Notes required to be
prepaid in accordance with this
SECTION 8.3. It is understood that the
Company does not control the Alfred I.
duPont Testamentary Trust.
(c) Offer to
Prepay Notes. The offer to prepay Notes contemplated by
subparagraphs (A) and (B) of this SECTION
8.3 shall be an offer to prepay, in
accordance with and subject to this SECTION
8.3, all, but not less than all, the
Notes held by each holder (in this case
only, "holder" in respect of any Note
registered in the name of a nominee for a
disclosed beneficial owner shall mean
such beneficial owner) on a date specified
in such offer (the "Proposed
Prepayment Date"). If such Proposed
Prepayment Date is in connection with an
offer contemplated by subparagraph (A) of
this SECTION 8.3, such date shall be
not less than 30 days and not more than 120
days after the date of such offer
(if the Proposed Prepayment Date shall not
be specified in such offer, the
Proposed Prepayment Date shall be the first
Business Day after the 45th day
after the date of such offer).
(d) Rejection. A
holder of Notes may accept the offer to prepay made
pursuant to this SECTION 8.3 by causing a
notice of such acceptance to be
delivered to the Company not later than 15
Business Days after receipt by such
holder of the most recent offer of
prepayment. A failure by a holder of Notes to
respond to an offer to prepay made pursuant
to this SECTION 8.3 shall be deemed
to constitute a rejection of such offer by
such holder.
(e) Prepayment.
Prepayment of the Notes to be prepaid pursuant to this
SECTION 8.3 shall be at 100% of the
principal amount of such Notes, together
with interest on such Notes accrued to the
date of prepayment, but without
Make-Whole Amount or other premium. The
prepayment shall be made on the Proposed
Prepayment Date except as provided in
subparagraph (F) of this SECTION 8.3.
(f) Deferral
Pending Change in Control. The obligation of the Company to
prepay Notes pursuant to the offers
required by subparagraph (C) and accepted in
accordance with subparagraph (D) of this
SECTION 8.3 is subject to the
occurrence of the Change in Control in
respect of which such offers and
acceptances shall have been made. In the
event that such
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Change in Control has not occurred on the
Proposed Prepayment Date in respect
thereof, the prepayment shall be deferred
until, and shall be made on, the date
on which such Change in Control occurs. The
Company shall keep each holder of
Notes reasonably and timely informed of (i)
any such deferral of the date of
prepayment, (ii) the date on which such
Change in Control and the prepayment are
expected to occur, and (iii) any
determination by the Company that efforts to
effect such Change in Control have ceased
or been abandoned (in which case the
offers and acceptances made pursuant to
this SECTION 8.3 in respect of such
Change in Control shall be deemed
rescinded).
(g) Officer's
Certificate. Each offer to prepay the Notes pursuant to this
SECTION 8.3 shall be accompanied by a
certificate, executed by a Senior
Financial Officer of the Company and dated
the date of such offer, specifying:
(i) the Proposed Prepayment Date; (ii) that
such offer is made pursuant to this
SECTION 8.3; (iii) the principal amount of
each Note offered to be prepaid; (iv)
the interest that would be due on each Note
offered to be prepaid, accrued to
the Proposed Prepayment Date; (v) that the
conditions of this Section have been
fulfilled; and (vi) in reasonable detail,
the nature and date or proposed date
of the Change in Control.
(h)
[Reserved].
(i) Certain
Definitions. "Change in Control" shall be deemed to have
occurred if any person (as such term is
used in Section 13(d) and Section
14(d)(2) of the Exchange Act as in effect
on the date of the Closing) or related
persons constituting a group (as such term
is used in Rule 13d-5 under the
Exchange Act),
(i) become the "beneficial owners" (as such term is used in Rule
13d-3
under the
Exchange Act as in effect on the date of the Closing), directly
or indirectly,
of more than 50% of the total voting power of all classes
then outstanding
of the Company's Voting Stock, or
(ii) acquire after the date of the Closing (x) the power to
elect,
appoint or cause
the election or appointment of at least a majority of the
members of the
board of directors of the Company or (y) all or
substantially
all of the properties and assets of the Company.
In making any numerical calculation under
clause (i) of this definition of
"Change in Control", Voting Stock
beneficially owned by the Current Management
Group shall not be included in the
numerator of such calculation, but shall be
included as outstanding Voting Stock in the
determining the denominator of such
calculation.
"Control Event"
means:
(i) the execution by the Company or any of its Subsidiaries or
Affiliates of
any agreement or letter of intent with respect to any
proposed
transaction or event or series of transactions or events which,
individually or
in the aggregate, may reasonably be expected to result in a
Change in
Control,
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<PAGE>
(ii) the execution of any written agreement which, when fully
performed by the
parties thereto, would result in a Change in Control, or
(iii) the making of any written offer by any person (as such term
is
used in Section
13(d) and Section 14(d)(2) of the Exchange Act as in effect
on the date of
the Closing) or related persons constituting a group (as
such term is
used in Rule 13d-5 under the Exchange Act as in effect on the
date of the
Closing) to the holders of the stock of the Company, which
offer, if
accepted by the requisite number of holders, would result in a
Change in
Control.
(j) All
calculations contemplated in this SECTION 8.3 involving the
capital
stock of any Person shall be made with the
assumption that all convertible
Securities of such Person then outstanding
and all convertible Securities
issuable upon the exercise of any warrants,
options and other rights outstanding
at such time were converted at such time
and that all options, warrants and
similar rights to acquire shares of capital
stock of such Person were exercised
at such time.
Section 8.4.
Allocation of Partial Prepayments. In the case of each partial
prepayment of the Notes pursuant to SECTION
8.2, the principal amount of the
Notes to be prepaid shall be (a) allocated
among each series of Notes in
proportion to the aggregate unpaid
principal amount of each such series of Notes
and (b) allocated pro rata among all of the
holders of each series of Notes at
the time outstanding in proportion, as
nearly as practicable, to the respective
unpaid principal amounts thereof not
theretofore called for prepayment. All
partial prepayments made pursuant to
SECTION 8.3 shall be applied only to the
Notes of the holders who have elected to
participate in such prepayment.
Section 8.5.
Maturity; Surrender, Etc. In the case of each prepayment of
Notes pursuant to this SECTION 8 and
subject to any deferral pursuant to SECTION
8.3(F), the principal amount of each Note
to be prepaid shall mature and become
due and payable on the date fixed for such
prepayment, together with interest on
such principal amount accrued to such date
and the applicable Make-Whole Amount,
if any. From and after such date, unless
the Company shall fail to pay such
principal amount when so due and payable,
together with the interest and
Make-Whole Amount, if any, as aforesaid,
interest on such principal amount shall
cease to accrue. Any Note paid or prepaid
in full shall be surrendered to the
Company and cancelled and shall not be
reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any
Note.
Section 8.6.
Purchase of Notes. The Company will not, and will not permit
any Affiliate to, purchase, redeem, prepay
or otherwise acquire, directly or
indirectly, any series of the outstanding
Notes or any part or portion of any
series thereof except upon the payment or
prepayment of each series of the Notes
in accordance with the terms of this
Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or
any Affiliate pursuant to any
payment, prepayment or purchase of Notes
pursuant to any provision of this
Agreement and no Notes may be issued in
substitution or exchange for any such
Notes.
Section 8.7.
Make-Whole Amount. The term "Make-Whole Amount" means, with
respect to any Note, an amount equal to the
excess, if any, of the Discounted
Value of the Remaining Scheduled Payments
with respect to the Called Principal
of such Note over the
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amount of such Called Principal; provided
that the Make-Whole Amount may in no
event be less than zero. For the purposes
of determining the Make-Whole Amount,
the following terms have the following
meanings:
"Called Principal" means, with respect to any Note, the principal
of
such Note that
is to be prepaid pursuant to SECTION 8.2 or has become or is
declared to be
immediately due and payable pursuant to SECTION 12.1, as the
context
requires.
"Discounted Value" means, with respect to the Called Principal of
any
Note, the amount
obtained by discounting all Remaining Scheduled Payments
with respect to
such Called Principal from their respective scheduled due
dates to the
Settlement Date with respect to such Called Principal, in
accordance with
accepted financial practice and at a discount factor
(applied on the
same periodic basis as that on which interest on the Notes
is payable)
equal to the Reinvestment Yield with respect to such Called
Principal.
"Reinvestment Yield" means, with respect to the Called Principal
of
any Note, 0.50%
over the yield to maturity implied by (a) the yields
reported, as of
10:00 A.M. (New York City time) on the second Business Day
preceding the
Settlement Date with respect to such Called Principal, on the
display
designated as "Page PX-1" of the Bloomberg Financial Markets
Services Screen
(or, if not available, any other national recognized
trading screen
reporting on-line intraday trading in the U.S. Treasury
securities) for
actively traded on-the-run U.S. Treasury securities having
a maturity equal
to the Remaining Average Life of such Called Principal as
of such
Settlement Date, or (b) if such yields are not reported as of
such
time or the
yields reported as of such time are not ascertainable, the
Treasury
Constant Maturity Series Yields reported, for the latest day
for
which such
yields have been so reported as of the second Business Day
preceding the
Settlement Date with respect to such Called Principal, in
Federal Reserve
Statistical Release H.15 (519) (or any comparable successor
publication) for
actively traded on-the-run U.S. Treasury securities having
a constant
maturity equal to the Remaining Average Life of such Called
Principal as of
such Settlement Date. Such implied yield will be
determined, if
necessary, by (i) converting U.S. Treasury bill quotations
to
bond-equivalent yields in accordance with accepted financial
practice
and (ii)
interpolating linearly between (1) the actively traded
on-the-run
U.S. Treasury security
with the maturity closest to and greater than the
Remaining
Average Life and (2) the actively traded on-the-run U.S.
Treasury
security with
the maturity closest to and less than the Remaining Average
Life.
"Remaining
Average Life" means, with respect to any Called Principal,
the number of
years (calculated to the nearest one-twelfth year) obtained
by dividing (a)
such Called Principal into (b) the sum of the products
obtained by
multiplying (i) the principal component of each Remaining
Scheduled
Payment with respect to such Called Principal by (ii) the
number
of years
(calculated to the nearest one-twelfth year) that will elapse
between the
Settlement Date with respect to such Called Principal and the
scheduled due
date of such Remaining Scheduled Payment.
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"Remaining Scheduled Payments" means, with respect to the
Called
Principal of any
Note, all payments of such Called Principal and interest
thereon that
would be due after the Settlement Date with respect to such
Called Principal
if no payment of such Called Principal were made prior to
its scheduled
due date; provided that if such Settlement Date is not a date
on which
interest payments are due to be made under the terms of the
Notes,
then the amount
of the next succeeding scheduled interest payment will be
reduced by the
amount of interest accrued to such Settlement Date and
required to be
paid on such Settlement Date pursuant to SECTION 8.2 or
12.1.
"Settlement Date" means, with respect to the Called Principal of
any
Note, the date
on which such Called Principal is to be prepaid pursuant to
SECTION 8.2 or
has become or is declared to be immediately due and payable
pursuant to
SECTION 12.1, as the context requires.
SECTION 9. AFFIRMATIVE COVENANTS.
The Company
covenants that so long as any of the Notes are outstanding:
Section 9.1.
Compliance with Law. The Company will, and will cause each of
its Subsidiaries to, comply with all laws,
ordinances or governmental rules or
regulations to which each of them is
subject, including, without limitation,
ERISA and all Environmental Laws, and will
obtain and maintain in effect all
licenses, certificates, permits, franchises
and other governmental
authorizations necessary to the ownership
of their respective properties or to
the conduct of their respective businesses,
in each case to the extent necessary
to ensure that non-compliance with such
laws, ordinances or governmental rules
or regulations or failures to obtain or
maintain in effect such licenses,
certificates, permits, franchises and other
governmental authorizations could
not, individually or in the aggregate,
reasonably be expected to have a Material
Adverse Effect.
Section 9.2.
Insurance. The Company will, and will cause each of its
Subsidiaries to, maintain, with financially
sound and reputable insurers,
insurance with respect to their respective
properties and businesses against
such casualties and contingencies, of such
types, on such terms and in such
amounts (including deductibles,
co-insurance and self-insurance, if adequate
reserves are maintained with respect
thereto) as is customary in the case of
entities of established reputations engaged
in the same or a similar business
and similarly situated.
Section 9.3.
Maintenance of Properties. The Company will, and will cause
each of its Subsidiaries to, maintain and
keep, or cause to be maintained and
kept, their respective properties in good
repair, working order and condition
(other than ordinary wear and tear), so
that the business carried on in
connection therewith may be properly
conducted at all times; provided that this
Section shall not prevent the Company or
any Subsidiary from discontinuing the
operation and the maintenance of any of its
properties if such discontinuance is
desirable in the conduct of its business
and the Company has concluded that such
discontinuance could not, individually or
in the aggregate, reasonably be
expected to have a Material Adverse
Effect.
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Section 9.4.
Payment of Taxes and Claims. The Company will, and will cause
each of its Subsidiaries to, file all tax
returns required to be filed in any
jurisdiction and to pay and discharge all
taxes shown to be due and payable on
such returns and all other taxes,
assessments, governmental charges, or levies
imposed on them or any of their properties,
assets, income or franchises, to the
extent such taxes, assessments, charges or
levies have become due and payable
and before they have become delinquent and
all claims for which sums have become
due and payable that have or might become a
Lien on properties or assets of the
Company or any Subsidiary; provided that
neither the Company nor any Subsidiary
need pay any such tax, assessment, charge,
levy or claim if (a) the amount,
applicability or validity thereof is
contested by the Company or such Subsidiary
on a timely basis in good faith and in
appropriate proceedings, and the Company
or a Subsidiary has established adequate
reserves therefor in accordance with
GAAP on the books of the Company or such
Subsidiary or (b) the nonpayment of all
such taxes, assessments, charges, levies
and claims in the aggregate could not
reasonably be expected to have a Material
Adverse Effect.
Section 9.5.
Corporate Existence, Etc. Subject to SECTION 10.7, the Company
will at all times preserve and keep in full
force and effect its corporate
existence. Subject to SECTION 10.7, the
Company will at all times preserve and
keep in full force and effect the corporate
existence of each of its
Subsidiaries (unless merged into the
Company or a Subsidiary) and all rights and
franchises of the Company and its
Subsidiaries unless, in the good faith
judgment of the Company, the termination of
or failure to preserve and keep in
full force and effect such corporate
existence, right or franchise could not,
individually or in the aggregate, have a
Material Adverse Effect.
Section 9.6.
[Reserved].
Section 9.7.
Notes to Rank Pari Passu. The Notes and all other obligations
under this Agreement of the Company are and
at all times shall rank at least
pari passu in right of payment with all
other present and future Senior
Indebtedness (actual or contingent) of the
Company.
Section 9.8.
Guaranty by Subsidiaries. The Company will cause each
Subsidiary which delivers a Guaranty to the
Agent or any other lender which is a
party to the Bank Credit Agreement or which
is an obligor under the Bank Credit
Agreement concurrently to enter into a
Subsidiary Guaranty, and within three
Business Days thereafter will deliver to
each of the holders of the Notes the
following items:
(a) an executed counterpart of such Subsidiary Guaranty or
joinder
agreement in
respect of an existing Subsidiary Guaranty, as appropriate;
(b) a certificate signed by the President, a Vice President or
another
authorized
Responsible Officer of such Subsidiary making representations
and warranties
to the effect of those contained in SECTIONS 5.1, 5.2, 5.6
and 5.7, but
with respect to such Subsidiary and such Subsidiary Guaranty,
as
applicable;
(c) such documents and evidence with respect to such Subsidiary as
any
holder of the
Notes may reasonably request in order to establish the
existence and
good
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standing of such
Subsidiary and the authorization of the transactions
contemplated by
such Subsidiary Guaranty;
(d) an opinion of counsel satisfactory to the Required Holders to
the
effect that such
Subsidiary Guaranty has been duly authorized, executed and
delivered and
constitutes the legal, valid and binding contract and
agreement of
such Subsidiary enforceable in accordance with its terms,
except as an
enforcement of such terms may be limited by bankruptcy,
insolvency,
reorganization, moratorium and similar laws affecting the
enforcement of
creditors' rights generally and by general equitable
principles;
and
(e) an executed counterpart of an intercreditor agreement or
joinder
agreement in
respect of the Intercreditor Agreement among the holders of
the Notes and
each such Person to which each such Subsidiary is an obligor
or is then
delivering a Guaranty giving rise the requirements of this
SECTION 9.8,
which agreement or joinder agreement, as the case may be,
shall provide
that the proceeds from the enforcement of any such Guaranty
shall be shared
on an equal and ratable basis with the holders of the
Notes.
SECTION 10. NEGATIVE COVENANTS.
The Company
covenants that so long as any of the Notes are outstanding:
Section 10.1.
Leverage Ratio. The Company and its Subsidiaries will not as
at the end of each fiscal quarter permit
the ratio of Consolidated Indebtedness
to Total Asset Value to exceed 0.55 to
1.00.
Section 10.2.
Unencumbered Asset Value Ratio. The Company and its
Subsidiaries will not permit as at the end
of each fiscal quarter the ratio of
Total Unencumbered Asset Value to Total
Unsecured Indebtedness to be less than
1.75 to 1.00.
Section 10.3.
Secured Indebtedness Ratio. The Company and its Subsidiaries
will not as at the end of each fiscal
quarter permit the ratio of Total Secured
Indebtedness to Total Asset Value to exceed
0.40 to 1.00.
Section 10.4.
Fixed Charges Coverage Ratio. The Company and its
Subsidiaries will not permit as at the end
of each fiscal quarter the ratio of
Consolidated Net Earnings Available for
Fixed Charges for the two immediately
preceding fiscal quarters (taken as a
single accounting period) to Consolidated
Fixed Charges for such two fiscal quarter
periods to be less than 2.5 to 1.0.
Section 10.5.
Limitations on Indebtedness. (a) The Company will not, and
will not permit any Subsidiary to, create,
issue, assume, guarantee or otherwise
incur or in any manner be or become liable
in respect of any Indebtedness,
except:
(i) Indebtedness evidenced by the Notes and the Subsidiary
Guaranty;
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(ii) Indebtedness of a Subsidiary Guarantor evidenced by the
Guaranty
delivered pursuant to the Bank
Credit Agreement; provided that the
Indebtedness
evidenced by any such Guaranty constitutes Qualified
Subsidiary
Indebtedness;
(iii) Indebtedness of the Company and its Subsidiaries outstanding
as
of the date of
this Agreement and described on SCHEDULE 5.15 hereto;
(iv) additional Indebtedness of the Company and its
Subsidiaries;
provided that at
the time of creation, issuance, assumption, guarantee or
incurrence
thereof and after giving effect thereto and to the application
of the proceeds
thereof:
(1) the ratio of Consolidated Indebtedness to Total Asset Value
as at such date shall not exceed 0.55 to 1.00;
(2) the ratio of Total Unencumbered Asset Value to Total
Unsecured Indebtedness as at such date shall not be less than 1.75
to
1.00;
(3) the ratio of Total Secured Indebtedness to Total Asset
Value
as at such date shall not exceed 0.40 to 1.00;
(4) Total Unsecured Subsidiary Indebtedness as at such date
shall
not exceed 10% of Total Asset Value as at such date; and
(v) Indebtedness of a Subsidiary to the Company or to a
Wholly-owned
Subsidiary and
Indebtedness of the Company to a Wholly-owned Subsidiary.
(b) The Company
will not as at the end of each fiscal quarter permit Total
Unsecured Subsidiary Indebtedness to exceed
10% of Total Asset Value.
(c) Indebtedness
existing within the limitations of SECTION 10.5(A)(III)
may be renewed, extended, refinanced,
replaced or refunded (without increase in
principal amount) without regard to the
limitations of SECTION 10.5(A)(IV).
(d) Any Person
which becomes a Subsidiary after the date hereof shall for
all purposes of this SECTION 10.5 be deemed
to have created, issued, assumed or
incurred at the time it becomes a
Subsidiary all Indebtedness of such Person
existing immediately after it becomes a
Subsidiary.
Section 10.6.
Limitation on Liens. The Company will not, and will not
permit any Subsidiary to, create or incur,
or suffer to be incurred or to exist,
any Lien on its or their property or
assets, whether now owned or hereafter
acquired, or upon any income or profits
therefrom, or transfer any property for
the purpose of subjecting the same to the
payment of obligations in priority to
the payment of its or their general
creditors, or acquire or agree to acquire,
or permit any Subsidiary to acquire, any
property or assets upon conditional
sales agreements or other title retention
devices, except:
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(a) Liens for taxes and assessments or governmental charges or
levies;
provided that
payment thereof is not at the time required by SECTION 9.4;
(b) Liens of or resulting from any judgment or award (i) the time
for
the appeal or
petition for rehearing of which shall not have expired or
(ii) in respect
of which the Company or a Subsidiary shall at any time in
good faith be
prosecuting an appeal or proceeding for a review and in
respect of which
a stay of execution pending such appeal or proceeding for
review shall
have been secured; provided that the Company or such
Subsidiary (i)
is contesting such judgment or award on a timely basis, in
good faith and
in appropriate proceedings, and (ii) has established
adequate
reserves therefor in accordance with GAAP on the books of the
Company or such
Subsidiary;
(c) statutory Liens of landlords and Liens of carriers,
warehousemen,
mechanics,
materialmen and suppliers and other Liens imposed by law or
pursuant to
customary reservations or retentions of title arising in the
ordinary course
of business, provided that (i) such Liens secure only
amounts not yet
due and payable or the payment of which is being contested
in good faith by
appropriate actions or proceedings and (ii) such Liens do
not materially
impair the business of the Company and its Subsidiaries;
(d) minor survey exceptions or minor encumbrances, leases or
subleases
granted to
others, easements or reservations, or rights of others for
rights-of-way,
utilities and other similar purposes, or zoning or other
restrictions as
to the use of real properties, (i) which are necessary for
the conduct of
the activities of the Company and its Subsidiaries or which
customarily
exist on properties of Persons engaged in similar activities
and similarly
situated and (ii) which do not in any event in the aggregate
Materially
impair the use of such properties in the operation of the
business of the
Company and its Subsidiaries, taken as a whole, or the
value of such
properties;
(e) Liens incidental to the conduct of business or the ownership
of
properties and
assets (including pledges, deposits or Liens in connection
with worker's
compensation, unemployment insurance and other like social
security laws,
attorneys' liens and statutory landlords' liens) and Liens
to secure the
performance of bids, tenders or trade contracts, or to secure
statutory
obligations, supersedeas, surety or appeal bonds or other Liens
of like general
nature, in any such case incurred in the ordinary course of
business and not
in connection with the borrowing of money; provided in
each case, the
o
